Interdependent Pricing and Markup Behavior: An Empirical Analysis of GM, Ford and Chrysler

Working Paper No. 3396 Our purpose in this paper is to develop and estimate a model of the US automobile industry that can be used to analyze the secular and cyclical strategic markup behavior and market structure of its three major domestic producers - - GM, Ford and Chrysler. The principal novelty...

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Bibliographic Details
Published inNBER Working Paper Series p. 3396
Main Authors Berndt, Ernst R, Friedlaender, Ann F, Judy Shaw-Er Wang Chiang
Format Paper
LanguageEnglish
Published Cambridge National Bureau of Economic Research, Inc 01.06.1990
Subjects
Automobile industry
Behavior
Econometrics
Economic theory
Hypotheses
Profits
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Summary:Working Paper No. 3396 Our purpose in this paper is to develop and estimate a model of the US automobile industry that can be used to analyze the secular and cyclical strategic markup behavior and market structure of its three major domestic producers - - GM, Ford and Chrysler. The principal novelty in this paper is not such much in the underlying theory (we build on what Timothy Bresnahan has called the "new empirical industrial organization" literature), but rather in the actual empirical implementation of a multi-equation model sufficiently general to permit the testing of a variety of specific behavioral postulates associated with the interdependent strategic profit-maximizing behavior of GM, Ford and Chrysler.
ISSN:0898-2937
DOI:10.3386/w3396